EU General Court annuls RMRS recognition withdrawal, keeps sanctions

The EU's General Court has annulled the permanent withdrawal of recognition from the Russian Maritime Register of Shipping (RMRS), ruling yesterday that the measure was disproportionate, while upholding the bulk of the sanctions imposed on the St Petersburg-headquartered classification society since Russia's 2022 invasion of Ukraine.

The court accepted a narrow proportionality argument. Judges held that suspending the organisation's approval would have achieved the same objective as permanent withdrawal, and that outright removal went too far because RMRS would face an entirely new approval process if sanctions were later lifted, with no guarantee of success. That reasoning did the claimant little practical good. The court rejected most of the challenge, including objections to the financial restrictions, and dismissed the attempt to overturn the port-entry ban as inadmissible.

Who decided, and for whom?

The deciding body is the General Court of the Court of Justice of the European Union, sitting in Luxembourg. The case pitted RMRS, a Russian state-owned ship classification society headquartered in St Petersburg, against the European Union institutions that designed and applied the sanctions regime. The Register has held EU recognition since 1998, a span of roughly a quarter of a century before the measures struck.

For the EU side, the judgment preserves the architecture of the sanctions package almost entirely. For RMRS, it delivers a doctrinal point on proportionality without restoring a single operating right in European waters.

What exactly did Brussels impose?

Following Russia's invasion of Ukraine in 2022, the EU adopted several measures against RMRS:

• investment and transaction bans;
• withdrawal of the society's authorisation to inspect and certify EU-flagged vessels; and
• a prohibition on ships certified by RMRS entering European ports and locks.

The contested element was the permanence of the withdrawal of recognition. The court's objection was not to withdrawing recognition as such, but to making that withdrawal permanent where suspension would have sufficed.

The claimant did not emerge empty-handed, but its winnings are largely on paper. The financial restrictions stand. The port-entry ban was never reached on the merits, because the court found the challenge to it inadmissible.

What does the ruling change in practice?

In the short term, very little. The ruling does not immediately restore the society's European operating rights. The effects of the annulled measure remain temporarily in place, and a corresponding provision in the EU sanctions regulations has not been overturned. Shipowners, insurers and port authorities should therefore continue to treat RMRS certification as they did before the judgment.

For practitioners, the decision is best read as a precedent on proportionality in sanctions design rather than as a sanctions loosening. Claimants challenging EU restrictive measures rarely succeed; when they do, it tends to be on the narrow ground that a less restrictive alternative existed. Here the less restrictive alternative was suspension, and the court said so. The judgment offers a usable template for future applicants, and a caution for the EU legislator, which now knows that permanence must be justified where a temporary measure would serve.

The institutional consequence is procedural rather than substantive. Brussels will presumably need to re-enact the withdrawal of recognition in a form the court finds proportionate, most plausibly as a suspension. Nothing in the judgment prevents it from doing so.

Where does this leave the Register?

RMRS keeps its legal personality, its St Petersburg headquarters and its argument. It does not, for now, keep its European inspection and certification business. The port-entry prohibition on RMRS-certified ships remains untouched, because the challenge to it failed at the admissibility threshold rather than on the merits.

The takeaway is simple: the court trimmed one measure for excess, and left the sanctions regime against the Russian Maritime Register substantially intact.

By Amara Osei, Global Law Wire